Singapore to slash ministers' pay

Singapore is slashing its leaders' unpopular multimillion-dollar salaries by at least a third, new guidelines show, but its ministers will stay among the world's best-paid politicians.

The cuts were promised by Prime Minister Lee Hsien Loong to ease public anger after a landmark general election in 2011, and he himself will take a 36 percent reduction in basic pay to Sg$2.2 million ($1.69 million).

That is still believed to be the highest salary of any elected head of government in the world -- more than four times as much as Barack Obama, who earns $400,000 a year as president of the United States.

Singapore's largely ceremonial president will see his salary reduced by 51 percent to Sg$1.54 million.

The People's Action Party (PAP), which led Singapore to independence from Malaysia in 1965 and has ruled ever since, has been on the defensive since its share of votes in the 2011 election fell to 60 percent, an all-time low.

Among the hottest issues against the PAP was ministers' high pay, which the government justified as necessary to attract talent from the private sector and deter the corruption that afflicts other Asian countries.

The cuts will be retroactive to the start of the current government's five-year term on May 21, 2011.

Despite the salary cuts, all cabinet members will be entitled to a "National Bonus" of up to three months' pay if targets are met for economic growth, employment and improvements in real incomes of all Singaporeans.

Singapore has the highest concentration of millionaire households worldwide, with 15.5 percent of all households having at least $1 million in assets, a study by the Boston Consulting Group showed last year, but the city-state also has one of the widest income disparities among developed economies.

Gerard Ee, a charity leader who headed the seven-month salary review, said the cuts showed political service should come with "sacrifice" but pay should remain attractive enough to attract people to serve in government.

"As a small country with a small citizen population and an open economy, quite naturally we have a very limited talent pool to enter politics and who are willing to devote a substantial part of their lives to serving in political office," he said.

Singapore cabinet salaries had been pegged to two-thirds of the income of the top four earners in six fields: banking, accountancy, engineering, law, manufacturing and multinational corporations.

This meant ministers' pay could still rise despite economic recessions.

Under the benchmarks unveiled on Wednesday, the salary of an entry-level cabinet minister was set at 60 percent of the median income of the 1,000 highest-earning Singaporean citizens, which amounts to Sg$1.1 million.

The prime minister's basic pay was set at double that amount.

Political analyst Seah Chiang Nee said the salary cuts indicate a "serious effort to address people's concerns" but added that the government should be more transparent about bonuses, allowances and other perks.

He told AFP that a more transparent way would be to publish how much the ministers earned before -- including all the perks -- and how much will they get now.

Despite the cuts, Singapore's top officials are still among the best paid in the world.

Hong Kong chief executive Donald Tsang earns roughly $543,500 annually, a government spokesman said, and the Japanese prime minister gets about $513,000 a year.

Australia's Prime Minister Julia Gillard currently earns about Aus$367,000 ($379,000) a year but is in line for a 31 percent rise pending the approval of parliament.

Malaysian Prime Minister Najib Razak makes a monthly salary of 22,826.75 ringgit ($7,244) plus monthly allowances, such as 6,508.59 ringgit ($2,065) for being a lawmaker.